Start early and create options
Your leverage comes from time and alternatives. A landlord who knows your current lease ends in 60 days, or that you only looked at one building, has little reason to move on price. In the Denver metro, start looking 12 to 18 months before you need to move, or 18 to 24 months if you need a build out or a large space.
Tour at least three spaces that would work, and ask for a proposal on each. Competing proposals are the single best tool a tenant has. They also show you what the market is really offering, which is often more than the asking terms on a flyer.
If you plan to stay where you are, the same rule applies. Your landlord would rather keep you than pay a broker commission, give a new tenant free rent and leave the space empty for months. Show them you are looking. See how to negotiate a lease renewal.
Negotiate the total cost, not the rent
Commercial rent in Colorado is quoted per square foot per year, and most retail and industrial space is leased triple net, so base rent is only part of what you pay. Compare spaces by what each one costs you over the whole term. For current numbers, see average commercial rent in the Denver metro.
| What to add up | Why it matters |
|---|---|
| Base rent and annual increases | A 3% bump each year adds up fast over a 5 or 10 year term |
| NNN charges (taxes, insurance, CAM) | Often $5 to $15 per square foot per year on top of rent in the Denver metro |
| Free rent | Lowers your average cost over the term |
| Tenant improvement allowance | Money the landlord puts into your build out instead of you |
| Your own build out, moving and cabling costs | Cash you spend up front |
A space with higher rent and a larger allowance can cost you less than a cheap space you have to build out yourself. See what triple net really costs each month.
What you can negotiate
Free rent
Months at the start of the lease with no base rent, and sometimes no NNN, while you build out and open. Longer terms earn more free rent.
- Often 1 month per lease year
- Ask for it after delivery, not after signing
Tenant improvement allowance
A dollar amount per square foot the landlord pays toward your build out. Ask whether unused allowance can go toward rent, furniture, cabling or signs. See how TI allowances work.
- Paid per square foot
- Larger on longer terms
Rent increases
Annual increases are negotiable. Even half a percent less each year saves real money over a long term.
- Commonly 3% a year
- Ask for fixed, not tied to inflation
NNN and CAM caps
You usually cannot negotiate taxes or insurance, but you can often cap how much controllable CAM goes up each year, limit the management fee, and exclude roof, structure and parking lot replacements.
- Caps often 3% to 5% a year on controllable CAM
Renewal and expansion options
The right to extend at a set rent or at market rent, and a right of first refusal or first offer on space next door. These keep you in a location you have invested in.
- Typically one or two 5 year options
Personal guaranty
Landlords often require one from small businesses. Ask for a cap in months of rent, a burn off after on time payments, or a larger deposit instead. See how personal guaranties work in Colorado.
- Caps of 6 to 24 months of rent are common
Terms tenants often overlook
Use and exclusives
- Make the permitted use broad enough to grow into
- Ask for an exclusive so the landlord cannot lease next door to a direct competitor
- Confirm the zoning allows your use before you sign. See how to check zoning in Colorado
Exit and transfer
- The right to assign or sublease with the landlord's consent not unreasonably withheld
- A release from the lease and guaranty if you sell the business to a qualified buyer
- An early termination option, even with a fee
Repairs and condition
- Have the landlord deliver roof, HVAC, plumbing and electrical in good working order
- Cap your HVAC repair cost or require the landlord to replace a failed unit
- Agree on what condition you must leave the space in, so you are not paying to remove your build out
Contingencies
- Make the lease contingent on your permits and, for restaurants, your liquor license
- Start rent when the space is delivered and permitted, not on a fixed date
- Add a rent credit if the landlord delivers late
Use a letter of intent first
Put the business terms in a letter of intent before anyone drafts the lease: rent, increases, free rent, allowance, term, options, NNN caps, guaranty, use and delivery condition. It is usually not binding, but it is where most of the negotiation happens. Once the landlord's attorney drafts a 40 page lease, terms you never raised are much harder to add.
A tenant representation broker runs this process for you, usually paid by the landlord, and since August 12, 2026, Colorado requires that arrangement to be in writing. See who pays a tenant rep broker.
Checklist before you sign
- Did you compare at least three spaces on total occupancy cost?
- Is free rent tied to delivery of the space, not the signing date?
- Is the tenant improvement allowance, and how it is paid, in writing?
- Is there a cap on controllable CAM increases?
- Do you have renewal options at a set rent or a defined market rent?
- Is the personal guaranty capped or set to burn off?
- Can you assign or sublease if you sell or outgrow the space?
- Does zoning allow your use, and is the lease contingent on your permits?
- Has a Colorado real estate attorney reviewed the lease?
This is general information, not legal advice. Have a Colorado real estate attorney review any lease before you sign it.
Common follow up questions
How long does it take to negotiate a commercial lease?
Plan on 60 to 120 days from first proposal to a signed lease for most small and midsize spaces in the Denver metro, and longer when there is a build out, permits or several rounds of attorney review.
Is commercial rent negotiable in Colorado?
Usually, yes. Asking rent is a starting point, and landlords often give more through free rent, a tenant improvement allowance and lower annual increases than through the rent itself. How much room there is depends on how long the space has been empty and how many other tenants want it.
Do I need a lawyer to sign a commercial lease?
It is strongly recommended. A broker negotiates the business terms and a Colorado real estate attorney reviews the legal language, including the guaranty, default, repair and indemnity sections. The cost is small compared to the rent you are committing to.
Who pays the tenant's broker on a commercial lease?
In most Colorado commercial leases the landlord pays both brokers' commissions under its listing agreement, so tenant representation usually costs the tenant nothing out of pocket. Your written agreement with your broker spells out how they are paid.
This page is general information, not lending, legal or tax advice. Programs, limits and terms change, and every situation is different. Talk with your lender, attorney and CPA before you decide.